Callaway Looks to SEVER Ties With TopGolf Bust In Exchange of $1B to Private Equity…

Me literally this weekend at TopGolf: $89.99 for a bucket of 6 Miller Lites?! Da fuq? 

Four years after dropping $2 billion to buy Topgolf, the company is reportedly unloading it for $1 billion to Leonard Green & Partners… a full-blown half-off sale for the brand that was supposed to “revolutionize golf.” Revolutionize, sure… but profitable? Not even close. 

(Source: Giphy) 

In short, back in 2021, Callaway thought they’d found golf’s golden goose… a booze-soaked driving range that turned the sport of retired accountants into a Vegas pregame for 30-year-olds who hate cardio. But reality came fast… the casual crowd wasn’t returning every weekend to drop a grocery bill on beer buckets and half-swing a 6 iron. Now the company’s market cap sits at just under $2 billion, down 65% since the deal.

(Source: Reuters) 

However, to Leonard Green… TopGolf is just a poor old damsel who needs a savior who can squeeze something out of what’s left. Meaning, Leonard already owns a small stake in TopGolf where they’ll probably do the same thing private equity always does: fire half the staff, double the cost of entry, and call it operation excellence lol. For more context, as of the recent earnings announcement, Topgolf’s revenue was down 7.8% YoY to $934 million with Q3 net losses widening 308% to $14.7 million. As a result, Callaway’s once-glorious stock now floundering around $11 a share, miles away from the $30+ era when they thought “golf entertainment” was the future of recreation.

To make matters worse, Bloomberg says Callaway’s even considering selling off the actual golf business next… the one thing in this dumpster fire that still works. Which means soon, the company behind one of the most iconic drivers ever might not own a single golf brand. So while the dream was golf for the TikTok generation… it poorly built itself on $20 cocktails, a pandemic bubble, and the illusion that “drunk golf” was a scalable business model. Spoiler: it wasn’t.

(Source: Giphy) 

So yeah, pour one out for Topgolf. The lights are still on, the music still plays, and people are still whiffing drives in rented bays… but behind the scenes, Callaway just pawned its crown jewel to pay the bar tab. Meaning, keep your eyes on MODG as the news continues to settle in… especially considering shares are up 3.49% over the last five trading days. Until next time, friends… 

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.